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The elections in Iran are nearly a year away, but it’s encouraging to see the emerging possibility of a new bid for the presidency by former President Mohammad Khatami. Last week, he hinted that he’s considering running against Mahmoud Ahmadinejad, the nutball whose support lies mainly in the paramilitary Basij force and elements of the Iranian Revolutionary Guard Corps. Can Khatami ju-jitsu the all-powerful Supreme Leader, Ayatollah Khamenei and his election-rigging Guardian Council? Can Khatami loom so large that even Khamenei might choose to support him over Ahmadinejad? Might Khamenei decide to back Khatami as part of a strategy to open a dialogue with the United States?

The rumors of a Khatami bid come against the backdrop of a general strike by the bazaaris, the merchant class, who closed the Tehran bazaar in protest against Ahmadinejad’s failed economic policies and a new, 3% value-added tax proposal. The New York Timesnoted that in 1979 it was the bazaaris who sparked the revolt against the shah, adding: “This is the first time since the revolution that they have protested on such a large scale.” The bazaaris reopened the market on Monday after talks with Ahmadinejad, who rescinded the tax.

Another reformist challenge to Ahmadinejad will come from Mehdi Karrubi — like Khatami, and unlike Ahmadinejad, another cleric . Karrabi, who favors resuming ties with the United States,is the first announced candidate in the 2009 elections. According to the Tehran Times, Karrubi said that he open to dialogue with Khatami, if Khatami chooses to run, about coordinating their efforts.

On Monday, several top world leaders — including Kofi Annan, the former head of the UN, the former prime ministers of Italy and France, and the former president of Ireland — visited Tehran to join Khatami in a “dialogue of civilizations.” Reports AP:

Former U.N. chief Kofi Annan and several former European leaders attended a conference on religion in Tehran on Monday, offering what some saw as a gesture of support for the moderate opponent of President Mahmoud Ahmadinejad hosting the gathering.

Mohammad Khatami, the moderate former Iranian president who hosted the event, has stepped up his criticism of Ahmadinejad in recent months and his Iranian supporters are pressing him to challenge the hard-line president, hoping a victory will end the country’s international isolation. He has said he hasn’t yet decided whether to run in the elections next June.

It’s way too early to say much about what this means, but it seems to me that many Iranian leaders are looking at the likely victory by Barack Obama and they’re trying to create favorable conditions for US-Iran talks. Khamenei himslef may favor such talks, and he’s said in the past that he wouldn’t rule out resuming US-Iranian ties. At the same time, expect Iran to drive a hard bargain.

Earlier this year, there were reports that the Bush administration was planning to open a US interests section for American diplomats in Tehran, but the plan was shelved. The latest reports say that the White House will revive the idea after the US election. Apparently, President Bush did not want to hand Obama a talking point against McCain, who opposes negotiating with or talking to Iran.

Last week, at the New America Foundation, Flynt Leverett and Hillary Mann Leverett, two former officials from the National Security Council who advocate a “Grand Bargain” with Iran, held an event to talk about their latest, an article in the Washington Monthly. Here’s an excerpt:

The next U.S. president, whether it is John McCain or Barack Obama, should reorient American policy toward Iran as fundamentally as President Nixon reoriented American policy toward the People’s Republic of China in the early 1970s. …

By fundamental change, we do not mean incremental, step-by-step engagement with Tehran, or simply trying to manage the Iranian challenge in the region more adroitly than the Bush administration has done. Rather, we mean the pursuit of thoroughgoing strategic rapprochement between the United States and Iran: the negotiation of a U.S.-Iranian “grand bargain.” This would mean putting all of the principal bilateral differences between the United States and Iran on the table at the same time and agreeing to resolve them as a package.

At the event, I asked Leverett who’s supporting the idea. he responded that he’s talked about it extensively on Capitol Hill, but that for political reasons there were few overt supporters there. “In private they see the logic of it,” he said. Some, including Senators Jim Webb (D.-Va.) and Dianne Feinstein (D.-Calif.) support it overtly. Steve Clemons, the indefatigable director of the foreign policy program at NAF, added that at an event he organized at the Democratic National Committee, the idea of a Grand Bargain between the US and Iran won overt backing from Greg Craig, a key member of Obama’s team, and Senator John Kerry.

Bob DreyfussBob Dreyfuss, a Nation contributing editor, is an independent investigative journalist who specializes in politics and national security.